Google Stadia's Possible Prices

Price is the consumer’s first impression. In gaming makes or breaks new products. The PlayStation 3’s sticker shock of $599 in 2006 ($752 adjusted for inflation) gave the Xbox 360 a head start for years. The PlayStation 4 launched $100 lower than the Xbox One in 2013, one of Microsoft’s mistakes that hobbled it this entire generation. When Google announced Stadia, a streaming platform for games, it didn’t mention the price once in its hour-long presentation.

Google may have avoided their “$599 US dollars” moment, but the price is going to be the deciding factor for early adopters. There are viable pricing models Google can pursue to be attractive to consumers and competitive in a market long-dominated by Nintendo, Sony, and Microsoft.

OnLive’s Subscription Model


OnLive was the first videogame streaming platform and operated from 2011 to 2015. Consumers had to pay a $5 monthly fee to use the service and buy their games on top of that. In a market where Netflix subscribers get unfettered access to its 5000+ title library, a service fee that grants the privilege to pay is a non-starter. Worse is a fee that locks people out of their purchases. If someone bought a $60 OnLive game and didn’t pay next month’s fee, they couldn’t play that game until signing up again. OnLive eventually did offer a $9.99 unlimited subscription, but it provided access to only a handful of games and not everything they offered. Consumers want to have it all.

The Advertiser-Driven Model


Google makes most of its money from advertisers. Stadia and its library of games could be free with this model. Google already has information on its global userbase which it can use to sell highly-targeted ad space during streaming. Ads can be implemented in a variety of ways.

Before playing a game, you may watch a few minutes of advertising, but this flies in the face of Google’s goal of getting people into playing “in less than five seconds.”

A better way would be to incorporate ads into the game. Loading screens can have an image or an auto-playing video. The more intrusive method is to have a transparent pop-up during gameplay that disappears after some time. There’s the possibility of ads disrupting important moments like cutscenes and difficult sections. If games are made with Stadia in mind, developers could prevent ads from appearing during specific segments.

Advertisers would be paid based on how long their ads are viewed and more if they click on it. Publishers would get part of the revenue split as well, incentivizing them to create games that keep consumers playing for a long time. The longer the game is the more opportunities there are to push ads to players. This’ll accelerate the growth of games as a service. Games such as Destiny 2 and Fortnite will have no issue adjusting to this model because they’re designed and updated to keep players invested for years. The most successful single-player experiences on the platform will be the open-world, near-endless games like Skyrim and Grand Theft Auto. It’s why Assassin’s Creed Odyssey is one of Stadia’s first games. The typical 8 to 12-hour experience, even if it’s triple-A, will struggle to make large enough profits because most players will finish them once and move on. Small, independent games will feel the biggest squeeze. They’ll get their licensing fee to be on the service but make little from ad revenue. It’ll also eat into revenue on other stores like Steam because people can play the game for free instead of paying $10 to $20.

Netflix’s Subscription Model


The only way a subscription would work is if consumers are given access to an all-you-can-play arcade where games are licensed from publishers. Google will still be collecting data—what you play, how, time spent—which the sale of can offset rising costs (upgrading servers, licensing fees, etc.), and consumers won’t have ads interrupt them.

New and big titles must launch on Stadia alongside major stores to keep from playing content-catch up, a problem that OnLive had. To offset the money lost from a potential $60 sale, publishers will need to be enticed with lucrative licensing deals. As more games are added to Stadia, Google will have to decide which games will have to be let go from the service. Older and smaller games that aren’t popular make the most sense to axe and make room for newer titles. If every game were to stay on the platform, subscription fees would rise until consumers wouldn’t pay.

Licensing costs won’t be an issue for 1st party games developed by “Stadia Games and Entertainment,” Google’s in-house studio. Like Netflix, if their in-house games are good enough, they’ll be some of the most played games on Stadia. Subscriptions will rise as those games aren’t available elsewhere and publishers will sign on to the service to access a large consumer base. If games and publishers leave the platform, 1st party games must be good enough to keep gamers subscribed.

The Digital Storefront Model


The easiest model for consumers and developers is to have Stadia be a free platform with software bought individually. Developers, big and small alike, put up their games on Stadia’s store for the price they want. Customers’ purchases are tied to their Google accounts.

Consumers with good PCs won’t be attracted to Stadia under this model. There’ll be no reason to purchase a title from Stadia when they can buy the same game from other stores and play with better performance. Only exclusive, must-play titles will bring in the hardcore demographic.

The Stadia store will serve casual gamers best. They’ll be exposed to a greater variety of games then the app stores they’re used to. They’ll be willing to purchase if they can play titles in short bursts on the device of their choice. The hurdle here is that casual gamers are used to paying at most $1 for games, if at all. Free demos of triple-A games can demonstrate the value of $60. Independent games can be a good starting point for trepid consumers with prices of $10 to $20.

Low-income consumers benefit from this model as well. The upfront costs of consoles and a good PC are too much for some people, but the internet is considered a necessity by a plurality Americans and 75% of the US has access to it. The cost of a game per hour is low, even at $60, so the initial cost to play—a physical platform—is a barrier that’s been removed. What will keep this demographic from playing is their internet speed, but US download speeds have been increasing. The average download speed over fixed broadband, 96.25 mbs, surpasses Stadia’s recommended 25 mbs connection. Playing over a mobile connection isn’t reliable right now. The average download speed is 27.33 mbs, but AT&T and Sprint’s average speeds are 22.17 and 20.38 respectively. This can be an issue resolved when 5G networks are widely adopted.

The revenue split between Google and publishers will be a contentious point. The costs for Stadia servers, let alone building more, won’t be cheap and the split must reflect this. A high cut for Google isn’t possible because support for Valve’s 30% on Steam, PC’s largest digital storefront, has “hit an all time low.” This is why the Epic Store takes 12% of each sale and the Discord store takes 10%. Something in the middle—between 18% and 25%—may be a fair compromise that won’t strain Google’s future resources and keeps it competitive with Steam.

Google’s Uphill Battle


Stadia must prove that it’s a main destination for gaming and not an alternative. The price will be the first impression. Then Stadia has to demonstrate that it won’t make the same mistakes as past streaming attempts. OnLive struggled with price, technical issues, and a lacking catalogue. Six years ago, consumers rejected Xbox One’s vision of an online-only future without used games. PlayStation Now, Sony’s streaming service since 2015, allowed games to be downloaded and played locally in 2018.

Streaming technology and the US’s internet have improved since OnLive. Attitudes towards online-only gaming has changed, as evidenced with the mainstream success of games like Fortnite. Though Sony has dipped its toes in streaming, it still believes in console generations because it’s been a successful model for them and their competitors. The only way Google will stand a chance at carving out a space for Stadia in gaming and maybe rattle the traditional model is to get people playing at the right price.

top